Although state law prohibits Texas elected officials from accepting campaign contributions during the legislative session, Gov. Rick Perry this year raised a record $22 million for the Republican Governors Association — a nonprofit political powerhouse that has been Perry's own top benefactor during his decade as governor.
During this year's legislative session moratorium, Perry chaired the Washington-based RGA as it raised about $4 million from Texans, tapping some of the same top contributors to Perry's gubernatorial campaigns, according to a Chronicle analysis of IRS records.
Perry, who chaired the governors association in 2008 and in 2011, has received more donations from the RGA than any other supporter. He collected $3 million from the RGA for his 2010 campaign and another $1 million in 2006 that was challenged by an opponent as an illegal contribution.
Those RGA fundraising activities raise the question of whether Perry was exploiting a loophole in the Texas moratorium by soliciting campaign contributions from Texans with stakes in the outcome of the 2011 legislative session.
Craig McDonald, director of Texans for Public Justice, argued that Perry was sidestepping the state law banning contributions during a legislative session and simply routing money to a different bank account.
"It appears the governor has a back pocket for his campaign money when he is restricted from taking money for his Texas account," McDonald said.
Perry spokesman Mark Miner said the governor's RGA fundraising was legal and benefitted others.
"Following the law, no fundraising was done for the governor's state political committee during the legislative session," Miner said in an email. "As chairman of the Republican Governors Association, Gov. Perry raised funds to help elect Republican governors around the country."
Perry camp settled suit
Both the Democratic Governors Association and the Republican Governors Association, political nonprofits that contribute directly to gubernatorial campaigns and spend millions more on advertising and strategy, have grown into mega-players in state governors' races in recent years, reporting record-breaking jumps in their war chests. In the first six months of 2011, both groups boasted of reaching new records — with the Democrats collecting $11 million to the Republicans' $22 million.
The governors behind those fundraising feats — Perry for the Republicans and Maryland Gov. Martin O'Malley for the Democrats — hail from states that ban campaign fundraising during legislative sessions. Both legislatures met this year.
DGA spokeswoman Elisabeth Smith said the Maryland attorney general ruled in 1999 that the governor could participate as a DGA fundraiser during a legislative session.
In an email, RGA spokesman Mike Schrimpf said "there are no ethical issues" with a group like the RGA accepting money during a legislative session, noting Texas law does not mention independent political committees.
Texas has banned campaign fundraising during the legislative session since 1981, when a bribery scandal prompted calls for a moratorium on cash and other gifts once exchanged openly on the legislative floor. Nationwide, 28 states restrict campaign contributions during legislative sessions, according to the National Conference of State Legislatures.
In 2006, Perry's $1 million contribution from the RGA sparked a lawsuit from Democratic challenger Chris Bell, who claimed the last-minute cash infusion violated state ethics laws because the RGA had not registered as a political committee in Texas. The Perry campaign settled the lawsuit with Bell, but the RGA is appealing a court verdict awarding the Democrat $2 million in damages.
Michigan PAC sent funds
The RGA did not register as a political committee in Texas in 2010, according to the Texas Ethics Commission website. Instead, it funneled its $3 million donation to Perry through its Michigan political action committee.
Washington, D.C.-based attorney Glenn Willard, a former Federal Elections Commission lawyer who advises candidates, political committees, corporations and nonprofit organizations on how to navigate campaign finance regulations, said state laws could, in theory, be used to limit or prohibit officeholders' fundraising activities on behalf of nonprofit political groups that contribute to state campaigns, but he said the specific language would determine whether any ban could be enforced.
Texans for Public Justice's McDonald argued that the Texas moratorium was intended to avoid the appearance "that legislative favors are bought and sold for contributions. In reality, they change dates on checks and it encourages creativity about where they park their money during a legislative session."
As individuals, Houston homebuilder Bob Perry and Dallas businessman Harold Simmons each has contributed more than any other individual or group to Gov. Perry with the exception of the RGA itself.
Bob Perry, who personally lobbied for passage of tort reform legislation and reform of the Texas Windstorm Insurance Association, gave the RGA $250,000 on April 12.
Simmons owns a radioactive waste facility fast-tracked by legislation approved by Texas lawmakers and signed by Perry this year. His company, Contran, contributed $250,000 to the RGA on June 27, a week after the legislative fundraising moratorium ended.
A spokesman for Bob Perry, Anthony Holm, said the homebuilder was a "strong supporter of the RGA long before the governor took a leadership role" and backs its goals to expand red states nationwide. A Contran spokesman did not respond to requests for comment.
Other RGA 2011 supporters included prominent Perry appointees: University of Texas regent Alex Cranberg, an Austin and Denver oil and gas investor, contributed $100,000, while fellow UT regents Jim Dannenbaum, of Houston, and Paul Foster, of El Paso, each gave $25,000. Friedkin Business Services, owned by Houston businessman Dan Friedkin, contributed $250,000 in April; Perry named him chair of the Texas Parks and Wildlife Commission on Wednesday.
Another major contribution of $250,000 came from Ryan Innovative Solutions. Company owner Brint Ryan, of Dallas, recently formed the Super PAC "Make Us Great Again" with former Perry chief of staff Mike Toomey to raise money for the Perry presidential effort.
No longer RGA chair
Perry was replaced as chair of the RGA after he declared his candidacy for president. But his leadership of the organization helped establish his reputation for generating campaign funds for Republican candidates and allowed him to build a powerful nationwide network of allies and financial backers.
The RGA touted Perry's fundraising prowess in a news release this summer, noting that the $22.1 million raised in the first half of this year eclipsed "the amount raised for the entire year in 2007, the last comparable election year. The RGA's 2011 fundraising total also significantly outpaces that from 2008 and 2009."
In the statement, Perry noted that "the RGA's record-breaking fundraising reflects our governors' position as the leaders of our Party.
"Republican governors are proving that the states are the most effective places from which to transform and save our country, and the RGA benefits from their leadership."